Tequila dodges tariffs as US and Mexico reach agreement

10th June, 2019 by Amy Hopkins

Donald Trump has “indefinitely suspended” scheduled tariffs on Mexican imports, but warned the “very profitable” plan could be reinstated.

Donald Trump has called off a series of planned tax hikes for Mexican imports into the US

Mexican trade – including the Tequila and mezcal industries – faced a crippling schedule of tax hikes for imports into the US in response to the “sustained influx of illegal aliens” at the US-Mexico border.

At the end of May, president Trump announced he was “invoking the authorities granted to [him] by the International Emergency Economic Powers Act” in order to address the “illegal migration crisis”.

The plan would have seen the implementation of a 5% tariff for all goods imported into the US from Mexico on 10 June. The White House said that “if the crisis persists”, the tariff would be increased to 15% on 1 August, and then 20% on 1 September. The tariff would increase to 25% on 1 October “until Mexico substantially stops the illegal inflow of aliens coming through its territory”.

On Saturday, the president took to Twitter to announce that the US had “reached a signed agreement” with Mexico to “greatly reduce, or eliminate, illegal immigration coming through Mexico and into the United States”.

The two nations have announced a joint declaration to “rapidly [resolve] the humanitarian emergency and security situation”.

However, president Trump warned that if there is not “great co-operation” between the US and Mexico, then the US “can always go back to” its “very profitable position of tariffs”.

Trump has been embroiled in a number of trade disputes with nations around the world over the last year.

While his tariffs on imported metals was the catalyst for retaliatory taxes on goods including American whiskey, US lawmakers have also threatened tariffs for EU products including brandy and liqueurs in response to an ongoing dispute with the World Trade Organization.

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